Grocers overpay vendors by an average of $37,000 per year, and most don’t know it. Progressive Grocer sat down with Sade Santana, Strategic Grocery AP Solutions Consultant at Ottimate, and Nick Sarpolis, Grocery Industry Expert at Ravyx, to discuss backdoor and receiving and vendor pricing processes and how they contribute to overpayment. 

Below is a recap of the conversation, lightly edited for clarity.

The hidden cost

Q: We’ve seen data that grocers overpay vendors by an average of $37,000 a year. How does that actually happen?

Nick: It usually isn’t carelessness; it’s that the data and the issues are scattered. A typical grocery store operation is running on a patchwork of systems: POS, receiving, hardware, and accounting. They all live in different places, which makes it hard to get everyone looking at the same information. Add in the fact that direct-to-store delivery (DSD) vendors operate with a lot of autonomy, and you’ve got a channel into the store that isn’t always tightly monitored. Trusted reps can effectively decide how much a store spends with their company, and without a system to catch it, that adds up fast. 

Q: Sade, from a systems perspective, how does better visibility help catch that?

Sade: Visibility means everyone — receiving, accounting, the buyer — is working off the same number. If the price or cost is agreed upon on the back end and that’s what shows up on the invoice, it’s a lot easier to catch a mismatch. That’s really the role automation plays here. It flags an overpayment or underpayment automatically, rather than relying on someone to notice it after the fact.  

Q: What’s happening at the store’s back door that creates so many downstream issues?

Nick: The back door is essentially an unregulated channel into the grocer’s bank account. Large chains have a chain of command with buyers, category managers, and layers of approval. Smaller independent grocers usually don’t have that structure. That gap shows up as excess inventory, shrinkage, ordering products that aren’t a great fit, overordering seasonal items, or getting blindsided by a surprise cost change nobody flagged. 

Q: Why is the backdoor receiver so important, even though they’re not responsible for auditing prices?

Nick: They’re the first line of defense. They’re auditing the quantity, condition, and basic accuracy of what comes in, even if they’re not verifying that the price matches what was negotiated. The problem is that receivers usually don’t know the background deal that was struck between a buyer and a vendor. So there’s a structural gap between what the receiver can see and what corporate negotiated.

Where the breakdown happens

Q: Where do communication breakdowns most often occur between the store and the corporate team?

Nick: The backroom is honestly one of the most chaotic places in a grocery store. It’s hard to staff, and most independent grocers don’t have a dedicated internal buying team; it might just be the owner or a department manager making these calls. So who’s actually monitoring price changes or promotions? Margins can dwindle fast if a promotional deal has an expiration date and nobody catches when it reverts to the original price. That’s a real gap in the process, and a gap in knowledge.

Q: Sade, how does data flow address that?

Sade: It creates a shared source of truth between the store-level operator and corporate. A lot of owner-operators don’t have the time or staff to chase this down manually. That’s where technology earns its keep, tying the back-end receiver at the store level directly to the pricing and accounting side. That takes a lot of the burden off the receiver, who was never meant to be the price-accuracy gatekeeper in the first place.

Q: Why are these challenges especially hard for independent grocers versus larger chains?

Nick: Independents are competing against groups that keep getting bigger, and they often don’t have a team of internal buyers the way a national chain does. So those pricing and promotion decisions land on whoever’s available without a dedicated receiver in place. There’s a large gap in where information is supposed to flow, and that gap is where margin leaks out.

Q: What does it look like when the owner is also acting as the buyer?

Nick: It means one person is wearing a lot of hats, from negotiating with vendors to managing the floor, while also being expected to verify that every invoice matches what was agreed. That’s not realistic to do consistently, especially across multiple locations. It’s normal for three locations to each handle receiving a little differently, simply because there’s no standard process forcing consistency. For a national chain, that would be unusual. For an independent, it’s the default until something gives them a reason to standardize.

The ripple effect on margins

Q: How do missed price changes, promotions, or credits affect margins over time?

Nick: Promotions are probably the clearest example. A vendor deal kicks in at a lower price for a set window, and if nobody’s tracking the expiration, it reverts to the original cost, and nobody notices. Multiply that across a year, across vendors, and that’s where a meaningful chunk of the $37,000 figure comes from. It’s rarely one big mistake; it’s small, recurring ones.

Q: What are the biggest risks of paper-based or disconnected systems?

Nick: Disconnected systems and paper-based accounting — DSD slips being the classic example — mean discrepancies sit untouched longer than they should. Without visibility, those issues don’t get routed to the right person quickly, so they escalate rather than being resolved. And while that’s happening, the grocer is losing ground on competitive pricing and healthy margins at the store level. 

Closing the loop with visibility

Q: How can better visibility into invoice and receiving data help teams make faster decisions?

Sade: When discrepancies are visible right away, they can be routed to the person who can actually act on them instead of getting stuck in a backroom or buried in a stack of paper. That speed matters in a business where margins are already thin. It’s also worth saying that this isn’t just about catching errors. Better visibility into vendor pricing helps buyers understand whether they’re keeping pace with inflation or whether a vendor is quietly taking advantage of it.

Q: Nick, what does that visibility mean at the store level in practice?

Nick: It means a cleaner, more consistent receiving process. Store teams can focus on confirming the right products show up without also being expected to trace a full price-change audit on every invoice. Right now, a lot of teams spend so much time just getting an invoice into the system that they never get to the part where they actually look at the data and make improvements. Visibility down to the line-item level changes that.

Q: What role does vendor communication play when there’s a pricing dispute or a return issue?

Sade: In a busy backroom, conversations with vendor reps often don’t get documented or signed off on; it’s just a verbal exchange in the middle of a delivery. Building a regular cadence of communication, whether that’s emails or calls, sets an expectation the vendor can count on, and it gives the grocer something to point back to when there’s a dispute. It protects the relationship as much as it protects the margin.  

Q: Why does integration with POS and back-office systems matter so much in this process?

Sade: Getting invoices into accounting software is really just data entry. The complexity shows up when you need to pull cost information from the back-office system, because that’s where time gets lost and margin slips through, especially around promotions. When everything lives in one connected system, everyone is working from the same data, and that alone removes a lot of the back-and-forth that used to eat up a team’s day.

From insight to action

Q: What operational impact does improving this workflow have across receiving, buying, and accounting?

Sade: It gives every department structure while letting them keep their autonomy. Everyone stays in their lane, but nobody’s working with stale or partial information. Receivers can focus on receiving. Buyers get visibility into vendor pricing they didn’t have before. Accounting isn’t reconstructing the story after the fact.

Q: Nick, what does that mean practically for lean grocery teams?

Nick: It lets a family-run business operate with the same structure as a national chain, without needing to hire like one. That’s the real opportunity for independents, putting a workflow in place that emulates what a big chain does, using the staff they already have. In an environment where competition keeps consolidating, that’s a meaningful edge.

Q: For a grocer listening today, what are the first signs they may have a backdoor visibility problem?

Sade: Start with the honest question: do I know how much margin is slipping out the back door? If the answer is no, that’s worth sitting with. Ignorance isn’t bliss here, especially with how much consolidation is happening in the space. The second question is just as telling: is my team overworked? If they are, they’re not catching everything, no matter how good they are. That’s not a knock on the team. It’s a sign they need a tool that gives them some of that time back. 

Q: What should grocers be thinking about if they want to future-proof this part of their operation?

Sade: Don’t stop at just scanning products in at the back door and getting them into the system; that alone won’t future-proof anything. Most of the investment in grocery technology has gone toward the front end, but the back end deserves just as much attention, because it directly affects the customer experience. If a promotion gets missed and a customer notices the price didn’t change, they may just look elsewhere for a better deal.